TMI Blog2011 (9) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 23.8.2010. 2. The appellants herein are manufacturers of biscuits. 'Sugar Invert Syrup' is an intermediate product used in the manufacture of biscuits. Biscuits are exempt from payment of duty vide Notification No.3/2007 dated 1.3.2007 and the intermediate product 'sugar syrup' is chargeable to duty in terms of Notification No.67/95-CE dated 16.3.95 as it is not entitled to exempt being an input used in the manufacture of exempted final product. The assessee's plea that the item in dispute which is prepared by adding sugar 800 grams with 200 ml. per kilo and meagre quantity of citric acid which is heated upto 118 degrees in a tank and cooled and then mixed with other ingredients of biscuits to have sugar dissolved fully is not marketable/not capable of being bought and sold in the market, has been rejected by the authorities and duty demand together with interest and penalty has been confirmed and imposed as a consequence. The finding that the disputed item is marketable is mainly based upon the opinion of the Chief Chemist, CRCL, New Delhi. He has opined thus :- "According to technical literature syrups are concentrated solution of sugars such as sucrose in wate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... points submitted in the defence reply submitted with the adjudicating authority have been incorporated in the Order-in-Original, which means that the order has been passed after considering the entire submissions. The contention of the appellant that the adjudicating authority has not recorded any finding on the issue of marketability of sugar syrup has got no relevancy. I find that the question of marketability arises only when, the same has to be marketed as such. The Sugar Syrup in this case is an intermediate product being used for manufacturing the biscuits, which are the exempted finished goods. In the instant case the issue relates to denial of benefit notification no. 67/95-CE, which clearly stipulates that duty on excisable intermediate product has to be discharged in case the finished goods are exempted. The notification does not stipulate any condition of saleability or marketability for allowing or denying the benefit of the said notification. The concept of individual marketability cannot be applied in case of such products because such intermediate products loose their identity when they are used in final products, which are marketed ultimately. Therefore, the market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marketability of such intermediate products has to be considered in conjunction with the final products. Since, the biscuits are sold, the saleability/marketability of the sugar syrup is established and the same can be deemed to be a marketable/saleable commodity." 8. Plain reading of the impugned orders discloses complete failure on the part of the Commissioner (Appeals) to consider the issue regarding the requirement of the marketability which is to be established by the department before a product can be qualified to be an excisable product warranting duty liability. The issue which was raised by the appellants was that the intermediate product in the nature of sugar syrup was not marketable and the same was required to be decided with reference to the said product only and not with reference to the final product, wherein the said product was used as one of the inputs. Merely because of the final product is marketable, it cannot be said that the intermediate product has necessarily to be a marketable product. It would all depend upon the facts of each case. 9. As far as the orders of the original authority are concerned, the said issue has been dealt with in Ambaji Foods (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their Sugar syrup since taste of the Sugar syrup of each manufacturer is distinct for which different ingredients in different proportions are mixed subjected to process/processes to manufacture sugar syrup and cited a catena of decisions. On going through the submission of the party in this regard it is seen that there is difference between actual sale and marketability of the product. Actual sale/marketing is not a factor to decide the capability of marketing of any goods. The various courts have pronounced in their judgments that even if the goods are not sold in the open market, the goods may be capable of being sold in the market. The possibility of the marketability of the product in question cannot be ruled out since the product Sugar syrup has got considerable shelf life and the party has themselves admitted that in hot water at 100?C sugar is added and stirred until it is completely dissolved thereafter citric acid at 104?C, an anti oxidant is mixed to it and then solution is cooled and filtered. Then it is taken for use. The Hon'ble Supreme Court in the case of Gujarat Narmada Valley Fert. Co. Ltd. vs. CCE as reported in 2005 (184) ELT 128 (SC) has held as under: "Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for the Adjudicating Authority to analyse the materials in relation to the facts of the case and to ascertain whether the reported decision of the higher authority is applicable to such the facts of the case in hand. 12. Plain reading of the orders passed by both the lower authorities apparently, therefore, discloses failure on the part of the authorities to consider the issue of marketability in the manner it was required to be decided as rightly pointed out by the learned advocate for the appellants. The authorities will have to analyse the materials on record and thereafter ascertain whether the same reveal the marketability of the product or not and accordingly decide about the duty liability. Since the authorities below have failed to carry out this exercise before confirming the demand, the orders passed by the lower authority are required to be set aside and the matters need to be remanded to the Adjudicating Authority to decide the same afresh and bearing in mind the law laid down by the Apex Court and various other decisions relied upon on behalf of the appellants and quoted hereinabove. In the result, therefore, the appeals succeed and impugned orders are set aside an ..... 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